Nonfungible token-based projects like Loot and The N Project have helped spike interest in the Metaverse to an all-time high, raising hopes again that blockchain will finally break through to the masses. Will it, or is history doomed to repeat itself? The problem is that the very things that capture the imagination of the public are the very same things that ultimately degrade the performance of the underlying platforms and raise barriers to entry higher than ever. In this article, I’ll explore the fundamental issues responsible for creating this dynamic with the goal of helping address these issues once and for all. The fundamental problem is that legacy blockchain technology — specifically Ethereum — introduces massive barriers to entry that hinder the ability of the Metaverse to onboard new users. These issues are then exacerbated by the failure to allow users of the network to statically price their network usage. The fees required to use popular NFT marketplaces can be an insidious problem because projects often foist these costs onto the user with often-unrealistic expectations of their profit-making potential. A quick look through Etherscan reveals the mind-numbingly high value of transaction fees paid per project. Projects like Bored Ape Yacht Club and Pudgy Penguins have had their users pay 106.7 and 111.4 Ether ( ETH ), respectively, to interact with their smart contract. Combined, users of these two projects have had to pay nearly $1 million in transaction fees alone! But here’s the thing: Those projects aren’t actually NFT-based games! In Axie Infinity, players can battle and breed little creatures which can then be sold or leased to other players precisely because they are implemented as NFTs. This is what makes Axie Infinity a great example of a game that is truly NFT-based. The problem is that, the more a game actually leverages NFTs and the benefits of a blockchain-based asset, the more ETH fees users have to pay. Both the trading and breeding aspects of these games incur transaction fees on the Ethereum blockchain. Axie Infinity has paid over 15,000 ETH in transaction fees, which roughly equates to over $60,000,000! That’s money that the developers could have spent to improve their product but, more importantly, that’s money that users could have spent purchasing even more digital assets from both Axie Infinity and other game developers. Many new users attracted by the NFT craze go right to a marketplace like OpenSea to list their own NFT. In an ideal world, this would be a fantastic opportunity to add another blockchain advocate to the ranks by delivering a fantastic user experience. Unfortunately, right now the transaction fee associated with simply listing an item for sale on OpenSea is around 0.1 ETH, or about $400. That’s not the kind of user experience that makes people think they are using some futuristic technology! These absurd fees not only hurt new users attempting to find out what this blockchain craze is all about, but they also dissuade larger business entities from building on top of blockchain platforms. Why would big video game publishers build NFT interoperability into their video games if the end consumer of their product would have to pay upwards of around $100 in order to trade their in-game weapon skins. Surely, no consumer would be excited about in-game NFT assets that cost more to trade than the base game. Even if a large video game publisher had aspirations to cover these blockchain transaction fees for their player base, these fees would still be prohibitively expensive and increase proportional to the game’s lifecycle. Effectively, this game publisher would be getting penalized as the replay value of their game increases! Given these shortcomings with the current transaction pricing of blockchains, it is no surprise that we have not seen video game developers and publishers alike jumping headfirst into the digitization of in-game assets using blockchain. Clearly, there are substantial issues with current NFT-based games on legacy blockchains. In large part, this is due to their transaction pricing mechanism, which hinders new users’ adoption and dissuades video game publishers from implementing NFT assets into their game. Unfortunately, we are not close to seeing triple-A video game titles using blockchain to track ownership of in-game assets. It would simply be far too costly for consumers or publishers to bear the cost of transacting on a fee-based blockchain. There is, however, hope. It is possible to eliminate fees from the user experience of a blockchain. The Steem blockchain (which famously forked into Hive to thwart the hostile takeover by Justin Sun) has been operating with a fee-less model since its inception in 2016. Splinterlands, one of the most successful blockchain-based games, has been leveraging the fee-less properties of Steem, and now Hive, to spectacular effect. Related: Going feeless is the only way to enable blockchain adoptionThe essen
